Gucci's Profit Deadline

[mdankwah]

ALEXANDER MCQUEEN, Stella McCartney and Balenciaga must turn a profit within three years, Robert Polet said yesterday, though he failed to elaborate on what would happen if they didn't. The 49-year-old ex-CEO of the frozen foods division of Unilever, who took over as head of Gucci Group after Domenico de Sole left in April, criticised his predecessor's "one size fits all" approach to the acquired brands which saw them all opening stores with heavy investment before they showed any sign of making a profit, and said that Gucci would continue to invest in them for just three years. Polet also said that he intended to double Gucci's revenue, which was £1.05 billion in 2003, over the next seven years. "I am very confident that we can do this with Gucci's current positioning at the high end of luxury distribution," he said, adding that de Sole and Tom Ford's management team had taken its eye off the ball while carrying out the multibrand strategy that began in 1999. City analysts appeared to believe in Polet's plans, meanwhile. "Let's see the numbers," said Philip Mitchell, vice president at JP Morgan. "If they can get Gucci up 10 per cent over the next three years, then we will believe them." (December 15 2004, AM)